Jan. 27 (Bloomberg) -- Canadian stocks declined a third
day, with the benchmark index erasing a gain for the year, as
financial shares retreated and commodities producers slumped
with oil and metals prices.

Bank of Montreal sank 2.1 percent after F&C Asset
Management Plc said it’s in talks to be bought by the Canadian
lender. Horizon North Logistics Inc. plunged 12 percent after
the oil services provider reported a drop in preliminary fourth-quarter earnings. Pacific Rubiales Energy Corp. lost 4.2 percent
as the price of crude fell a second day.

The Standard & Poor’s/TSX Composite Index decreased 135.47
points, or 1 percent, to 13,582.29 at 4 p.m. in Toronto. The
gauge closed at a three-week low after plunging 2.9 percent
since Jan. 22, the biggest three-day slide since June. The index
has fallen 0.3 percent this year after rising as much as 2.7
percent earlier in January.

“We’ve had strong markets for a while so we’re due for a
checkback,” Jeff Young, chief investment officer at NexGen
Financial Corp., said in a phone interview. The Toronto-based
firm manages about C$900 million ($815 million). “Financials
seem to be the big culprit here. The global markets certainly
don’t help. The S&P/TSX is certainly impacted by global growth
and more so by emerging markets growth than the U.S.”

Emerging-market stocks have had the worst start to a year
since 2009 and currencies from Turkey to South Korea tumbled
amid signs growth is slowing in China as the Federal Reserve
prepared to review further stimulus cuts this week.

Consumer Confidence

The Bloomberg Nanos Canadian Confidence Index fell for the
second straight reading as optimism about the economy waned
during a week where the nation’s currency depreciated to the
lowest in more than four years. Consumers grew more pessimistic
about their personal finances, the national economy and job
security, survey data show.

The Canadian dollar depreciated to the lowest in 4 1/2
years against its U.S. counterpart on Jan. 22 after the Bank of
Canada kept its benchmark interest rate unchanged and said the
strength of the currency is hurting exporters.

Nine of 10 main industries in the index retreated at least
0.3 percent, on trading volume that was 4 percent above the 30-day average.

Financial stocks, which account for 34 percent of the
benchmark index for Canadian equities, dropped 1.5 percent today
for a third day of declines. The group of banks and insurers has
fallen 3.3 percent this year after rallying 19 percent in 2013.

Bank Stocks

Bank of Nova Scotia sank 2.2 percent to C$61.69, a three-month low. Royal Bank of Canada lost 1.3 percent to C$69.38, the
lowest since Dec. 18.

Bank of Montreal fell 2.1 percent to C$70.46, the lowest
this year. Canada’s fourth-largest lender by assets offered
about 697 million pounds ($1.2 billion) for F&C Asset
Management, the London-based money manager said in a statement
today.

Energy stocks declined 0.9 percent as a group as oil
dropped for a second day. Pacific Rubiales plunged 4.2 percent
to C$16.50, the lowest level since February 2010. TransGlobe
Energy Corp. retreated 4.8 percent to C$8.82.

Horizon North plunged 12 percent to C$7.24, the lowest
since September. The company reported that preliminary fourth-quarter earnings excluding some items dropped as much as 65
percent from the prior quarter. Revenue for the Calgary-based
oil-and-gas service provider decreased as much as 40 percent in
the same period.

Hudson’s Bay Co. rose 1.2 percent to C$16.34, erasing an
earlier drop of 3.9 percent. The retailer announced it will sell
its Toronto location for C$650 million in a sale and leaseback
transaction. Proceeds of the transaction will be used to reduce
debt and invest in growth initiatives, Hudson’s Bay said.